Posted by Alimar Private Label on 9/21/2015 to Education
What are minimum order quantity (MOQ) requirements?
- Manufacturers will often have a required minimum order for private label products.
- Not all manufacturer’s require the same minimums.
- Don’t be afraid to ask for a referral if a manufacturer’s minimums are too high for your business.
- “Small” minimums mean different things to different manufacturers. Be clear about what you need.
- Minimums may be imposed by suppliers of the raw materials and packaging required for your project.
- Some manufacturers do not want to deal with small orders.
- Larger orders can often be processed in large batches yielding to efficiencies in scale, discounted raw materials and lower labor costs.
- If your project requires non-stock or high dollar components, the manufacturer wants to be certain they will not be stuck with leftover materials that cannot be resold to other clients.
- How much material can you move in a month? 6 months? 12 months?
- Does your business have enough cash-flow to prepay for MOQ manufacturing when terms are unavailable?
- What is the shelf-life of the product? Perishable items cannot be stored indefinitely to satisfy future demand.
- Where will you store excess inventory?
- If your manufacturer offers onsite storage, what is the fee?
- How will you dispose of unsold product past its expiration date?